Monotype Imaging Holdings Inc. (NASDAQ:TYPE) has experienced a decrease in support from the world’s most elite money managers lately.
If you’d ask most shareholders, hedge funds are viewed as slow, old investment tools of yesteryear. While there are greater than 8000 funds trading today, we hone in on the moguls of this group, around 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total asset base, and by monitoring their top investments, we have found a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as integral, positive insider trading activity is a second way to parse down the marketplace. Obviously, there are a variety of reasons for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, let’s take a gander at the latest action surrounding Monotype Imaging Holdings Inc. (NASDAQ:TYPE).
Hedge fund activity in Monotype Imaging Holdings Inc. (NASDAQ:TYPE)
At year’s end, a total of 8 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Monotype Imaging Holdings Inc. (NASDAQ:TYPE), worth close to $23.4 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Lane Five Capital, managed by Lisa Rapuano, which held a $5.9 million position; the fund has 6.9% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
Judging by the fact that Monotype Imaging Holdings Inc. (NASDAQ:TYPE) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies that elected to cut their full holdings heading into 2013. At the top of the heap, Paul Tudor Jones’s Tudor Investment Corp dropped the biggest investment of the “upper crust” of funds we watch, valued at close to $0.2 million in stock. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Monotype Imaging Holdings Inc. (NASDAQ:TYPE)
Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, Monotype Imaging Holdings Inc. (NASDAQ:TYPE) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Monotype Imaging Holdings Inc. (NASDAQ:TYPE). These stocks are Jive Software Inc (NASDAQ:JIVE), Lifelock Inc (NYSE:LOCK), FleetMatics Group PLC (NYSE:FLTX), Imperva Inc (NYSE:IMPV), and Insight Enterprises, Inc. (NASDAQ:NSIT). This group of stocks are the members of the application software industry and their market caps are closest to TYPE’s market cap.